Netflix Inc.
NFLX, -0.53%
on Thursday cut its domestic subscriber guidance by 1 million users, the fallout from the company raising prices on one of its most popular movie-rental plans, a move that angered many members but which the company continues to defend.

News of the 4% cut in its subscriber outlook knocked 15% off Netflix's share price, sending the stock to its lowest levels in 2011. Netflix, though, did not change its financial guidance for the quarter.

The Los Gatos, Calif., company this summer ended its popular $9.99 per-month DVD-rental and movie-streaming plan, and required customers to pay $7.99 a month for each service, starting in September. The price increase caused a quick and harsh backlash among Netflix customers, something the company again acknowledged Thursday.

"We know our decision to split our services has upset many of our subscribers, which we don't take lightly, but we believe this split will help us make our services better for subscribers and shareholders for years to come," the distributor of movies and TV shows said.

Netflix said it now sees 24 million domestic subscribers through the third quarter, down from 25 million. The biggest decline is in its number of DVD-only subscribers, which fell to 2.2 million from 3 million. Streaming-only members dropped to 9.8 million from 10 million.

The number with both a DVD and streaming subscription remained at 12 million. The company didn't change its international subscriber guidance.

The slowdown in Netflix's momentum worried investors, as shares fell $31.73 premarket to $176.98. Before Thursday, the stock was up 46% over the past 12 months but down 19% over the past three months.

"Netflix has been a momentum story--you need more subs to buy more content, which allows you to get more subs," Janney Capital Markets analyst Tony Wible said. "Now you're starting that momentum in the other direction, where you have fewer subs, which could lead to lower content, to fewer subs."

In July, after announcing the price change, the company said it expected total subscribers to continue growing and that its fiscal quarter following the pricing changes could lead to the first time it notches at least $1 billion in sales.

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